Alan Grayson loses $18M in fraud scheme

Controversial House Democrat Alan Grayson lost $18 million as part of a criminal scheme run by a Virginia man that bilked more than 100 investors out of more than $35 million, according to federal court documents.

William Dean Chapman, 44, of Sterling, Va.,was sentenced to 12 years in federal prison on Friday. Chapman pled guilty to one count of wire fraud in May, according to the U.S. Attorney’s office for the Eastern District of Virginia, which oversaw the case.

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Chapman was the founder and owner of Alexander Capital Markets. Customers would give their stock holdings to Chapman as collateral for loans. Chapman then improperly sold the stocks, despite assuring the customers that they would get back the full value of their holdings.

An unnamed elected official named “A.G.” was identified as having lost more than $18 million in what was essentially a Ponzi scheme run by Chapman.

After Chapman tried to withdraw his guilty plea at the last minute, federal prosecutors submitted a document that included Grayson’s name as part of their legal response to Chapman’s move.

It appears from the court documents that Grayson’s losses occurred several years ago, around 2007. Chapman at one point offered to pay Grayson $100,000 per month to help settle his debt to the Florida Democrat.

“I can confirm that it’s Rep. Grayson,” a representative for the congressman said in an email. “Court documents seem to have disclosed the congressman’s full name, despite the existence of court procedures that are intended to protect victims’ privacy.”

Grayson was elected to the House in 2008, but lost a reelection bid in 2010. He was reelected in Nov. 2012.

According to his most recent annual financial disclosure report on file with the House of Representatives, Grayson has a minimum of $22.8 million in assets, as well as at least $5 million in liabilities.

A Harvard Law School grad, Grayson helped create a successful long-distance telecommunications company.